Sports Obsessed Straight Men In China Can Buy Authentic Curie Jerseys

"Brothers, where can I buy the original Hardon Basketball Jersey?"

"For help, where can I buy authentic Curie Jersey?"

"Where can I get a James shirt?"

In Hupu, the domestic straight men who are addicted to sports have to pay for their hobbies. The voice reached the other side of the ocean, and fanatics, a sports retailer in the United States, finally made a move.

After accepting the investment from Alibaba and Softbank, fanatics announced at the end of February this year that it would establish a joint venture company fanatics China with hillhood capital to bring authorized sportswear and peripheral products to China.

According to Forbes, the U.S. vertical e-commerce platform is very popular in the capital market. After getting $350 million in round e financing in August last year, the valuation has reached $6.2 billion, and the next step is to go public.

Why did such a sports e-commerce company growing up in the United States come to China on the eve of listing? Will straight men buy it?

"Online decathlon"

In China, it is said that there are two places for straight men's Paradise: Online tiger rush and offline decathlon.

In the United States, there is such a place where tiger puff and decathlon are combined, which is the official website of fanatics.

When people in fashion circle open fanatics' website, they may criticize its old-fashioned design, but for sports fans, it is a shopping paradise.

From NFL (American Professional Football League) to NBA (American Professional Basketball League), as well as Manchester United and Chelsea in the field of football, it covers the clothing and peripheral products of more than 300 teams, leagues and events, covering almost all the mainstream sports in the United States.

Expanding the camp of authorized clubs and teams is one of the ways of fanatics to build a moat.

In 2017, for example, fanatics replaced Nike as an NFL * * authorized retailer. In July 2020, fanatics bought another licensed sports manufacturer, wincraft, and took advantage of the acquisition to win hundreds of university teams and clubs.

If decathlon is relying on its own brand to expand its product matrix, fanatics is to increase its product line by getting contracts from one league to another.

However, compared with decathlon's cheap and sinking, fanatics relies on the rapid response of the supply chain. Some media compare it to "Zara in sports".

As an authorized retailer, fanatics undertakes not only the sales of the team's clothing and peripheral products, but also the whole work from design, manufacturing to sales after authorization.

This kind of control over every link of the supply chain brings about more efficient operation. Take the night when the Toronto Raptors won the championship in 2019 as an example, fanatics produced corresponding peripheral products for the champion team within two hours.

Normally, when a player changes to a new team, fans can also order a new shirt from fanatics within hours of the news breaking out.

What founder Michael Rubin wants to create is that users can buy their favorite sports team / star's clothes and surroundings at any time.

This speed of production and transaction is also related to fanatics' own e-commerce sales mode - brand authorization, factory flexible production, and online e-commerce platform.

In 2018, Michael Rubin, chairman of fanatics, mentioned in a dialogue with Yahoo Finance that 90% of their sales come from their own e-commerce platforms, and the remaining 10% come from other offline retail channels such as stadiums.

Fanatics seems to understand the psychology of sports fans very well.

The good service and advanced productivity of e-commerce platforms are never divided by national boundaries. After the launch of Taobao / tmall for no reason, the corresponding services have become the standard configuration of major e-commerce platforms.

Fanatics's website also launched a "365 day worry free return" service, and you can enjoy a discount price when you buy a fan card, and you can change your jersey free of charge after your favorite player transfers within three months.

Online understanding of fans' operation and sales strategy, and offline supply chain with quick response is the key to fanatics' success in this sports business in the past 20 years. By 2020, the company's annual transaction volume will reach 3 billion US dollars.

Why do you come to China?

Looking back on fanatics' history, in 1995 it was just a fan store run by the tregg brothers and sold around the local college team.

By 2000, the founders focused on online opportunities and began to transform to e-commerce. Like other e-commerce websites, fanatics's strategy is to drain from content websites and accumulate the first batch of customers through various marketing means.

After 2006, the company grew up in the merger and acquisition. In 2012, eBay Chairman Michael Rubin bought fanatics in his own name.

In the same year, it bought its rival dreams with $158 million in cash and $25 million in debt. Two years later, the company was valued at $3.1 billion.

In 2017, it bought MLB * * authorized manufacturer majestic athletic, and obtained $1 billion of financing from Softbank in the same year, including NFL and MLB, which were valued at $4.5 billion at that time.

In 2020, the valuation of fanatics will rise to $6.2 billion after round e financing.

After taking over fanatics, Mike Rubin talked about thinking about the company's future development. "Amazon and Alibaba have changed retail, but if you do the same thing, if you sell products similar to them, you're dead."

Getting more authorization and focusing on the vertical sports track is what fanatics has been strengthening since then. However, it is not easy to make the cake bigger in a vertical track. Internationalization has become a must.

At present, fanatics has entered 11 countries, including the United Kingdom, Spain and Japan, and 10% of its revenue comes from the international market.

In the process of internationalization, China is one of the most important markets. "Since Softbank's investment, China has been our core concern market."

Ravid, head of fanatics' international business, also mentioned that entering China is also the most concerned thing of more than 300 leagues and teams. "The most frequently asked question by our partners is when to enter China. It has become an increasingly important market for sports events. "

According to Ravid's analysis, European football is a huge and growing field in China, and Manchester United, Paris Saint Germain and Bayern Munich all cooperate with them, which is one of their advantages. "For Manchester United and the NBA, this is a really huge gathering place of powder silk, and these fans are thirsty for official authentic products."

Their other judgment comes from the blank space in China's authorized sports commodity market. "Most of China's sports industry is supported by sports brands, but they have not focused on authorized products. Now in China, no one has unlocked this business."

Decathlon only opened some offline stores last year to explore a new sports retail model. However, its sports hypermarkets still focus on offline, and license with fanatics. Basically, it takes the online single mode, which is two different routes.

At present, in China, there is no other large-scale third-party sports e-commerce in China, except for the platform focusing on fashion shoes. The main ones are single tmall flagship store like NBA, Adidas, Nike and other brands, as well as online stores of taobo sports.

According to the Research Report of data bridge market research, the global sports authorized sports goods market is expected to grow from 31.7 billion US dollars in 2019 to 46.87 billion US dollars in 2026. At present, fanatics' annual sales are 3 billion US dollars, and their expectation for China is "to reach 1 billion US dollars."

In conclusion, an e-commerce company that is vertical enough and focused enough has set a big piece of cake in China.

Opportunities and challenges of Sinicization

Fanatics has considered for a long time what kind of attitude to enter China.

Ravid explained why he had been watching the Chinese market before. "We are not arrogant enough to think we can do it alone. We need a partner who has eyes and ears in this land. "

Hillhouse capital is such a partner to replace their eyes and ears. According to the news, both sides hold half of the equity in the joint venture.

Hillhouse capital was founded by Zhang Lei in 2005. It has invested in many Internet giants including Baidu, Jingdong and Tencent. It has also been involved in sports and clothing. Topsports is adinike's distributor in China, and operates more than 20000 offline stores.

According to the information that has been confirmed, fanatics China, a joint venture company, will be based in Shanghai. With the ability of its partners, Xingong will design, produce and sell these sports products according to the trend of China. The forms include not only the e-commerce mode that the company is good at, but also the offline physical stores.

It is worth mentioning that in addition to hillhood capital and Softbank, fanatics has another partner, Alibaba.

As early as 2013, Alibaba invested $130 million in fanatics. According to Reuters, fanatics is likely to cooperate with Alibaba's e-commerce platform after entering China.

The specific form of cooperation and the final form of e-commerce settled in China is unknown, but its forms in South Korea and Australia may give us some inspiration.

When fanatics entered South Korea in 2019, it signed a 10-year contract with coupang, a local e-commerce company. Fanatics was authorized to sell all its self owned goods on the e-commerce website. In 2020, they will cooperate with rbel, an e-commerce platform in Australia, in a similar way, to provide these licensed products for this website.

This may mean that in China in the future, tiger fans can also buy authorized peripheral products directly from tmall, which are also independently customized for Chinese fans.

An NBA fan told ecommerce online that he would at least express his expectation for fanatics to enter China after experiencing the hardships of overseas shopping and the unreliable purchasing agency.

However, from the perspective of fanatics, although there are sufficient barriers on authorized sports goods, China's sports e-commerce is not as blue as they expected.

From the perspective of tmall's flagship stores, NBA, Bayern and other leagues and clubs that are most popular with Chinese fans among their partners have opened official flagship stores and have a direct dialogue with fans. And other hot teams are also scattered sports brands such as ADI, Nike in the sale of authorized goods.

In addition to the Alibaba e-commerce platform, Jingdong Mall and wechat app stores all share part of the market. Some hot teams and products around the event have reached consumers in various ways.

Of course, these scattered supply and demand are still difficult to shake fanatics' advantage. But as a successful self-employed sports e-commerce in the United States, perhaps what it really needs to consider is whether those huge authorized commodity warehouses can attract Chinese fans? And whether the sports goods operation experience they are good at can really be implemented in China?